Andrei Kurkov is dismayed to see how the portrait of post-Soviet Ukraine created for his political satire Death and the Penguin has come so close to reality. As a writer, he had a moment of satisfaction when he began to see how neatly life was imitating art, but it was a fleeting sensation, quickly overwhelmed by a sense of gloom.

Contract killings, executed journalists, rampaging political corruption and an environment of profound moral chaos fuel the plot of Kurkov's novel, creating a humourously bleak picture of Ukrainian life. The absurdities of the lifestyles enjoyed by the new mafiosi and the criminal elite are evoked with the cheerful narrative simplicity of a children's fable. But a glance at the news emerging daily from Ukraine gives a sour edge to the comedy.

The novel's publication in Britain comes as political crisis continues to unfold in Kiev - a thickening scandal, fermenting on contract killings, an executed journalist and political corruption. The chaos surrounding the beheaded opposition journalist Georgy Gongadze and continuing speculation over the possible involvement of President Leonid Kuchma in his death make the extraordinary events of the novel seem unremarkable. Kurkov was encouraged by his Russian publishers to boost sales by classing his work as a detective-thriller, but its events are too surreal to unwind according to standard thriller rules.

The novel's hero, Viktor Zolotaryov, is a frustrated writer whose short stories are too short and too sensation-free to be published. When a newspaper editor offers him a new job as star obituarist, paying $300 a month to write 'snappy, pithy, way-out' pieces, he agrees. His brief is to select powerful figures from Ukrainian high society and prepare mournful articles in readiness for the possibility that they might suddenly die. Initially, Viktor craves recognition and is despondent that none of his articles ever gets into print ('Not only had none of them died, but not one had so much as fallen ill,' he observes).

But then the unexpected death of a senior politician after falling from a sixth-floor window ('Was cleaning it for some reason, although apparently it wasn't his. And at night,' the sinister newspaper editor comments) triggers a clan war of killings and Viktor's obituaries are suddenly in demand. It is only later, when he discovers that his pieces are neatly filed in the editor's office - marked with dates for imminent publication although their subjects remain alive - that he becomes uncomfortable about his role in the eruption of violence unsettling the city.

The obituarist assumes a pragmatic approach to the uneasy morality of his work - accepting the money and getting on with it. This approach is one which Kurkov believes many Ukrainians have been forced to adopt, and his book is free of any censure for the way characters behave. 'People have got used to the corruption. People here are flexible and they accept the new rules and don't dwell on moral questions. They just watch what everyone else is doing and try to find their own ways of deceiving others to make money for themselves to survive,' he says.

Viktor's blossoming career is watched with melancholic disapproval by the gloomy figure of his pet penguin, Misha, adopted a few months earlier from the impoverished city zoo. In the cynical atmosphere of post-communist Kiev, the penguin is the only being which inspires in Viktor real affection, a devotion which drives him to organise a heart transplant for his ailing pet, purchasing, at great expense, the heart of a four-year-old child.

Kiev is a city of constant power cuts, a place where dollar bribes must be handed out before ambulance men can be persuaded to ferry dying men to hospital, and where hospital staff have no medicines to ease patients' pain, let alone cure them. This is a place where once-distinguished scientists do not have enough money to buy potatoes; it is also a place where criminals will pay $1,000 a time to hire penguins to add class to their glitzy funeral parades.

Kurkov's description of the gangster underworld is strengthened by first-hand experience. 'Some of my friends in publishing were killed and one of my film producers was murdered shortly after the film was finished. Moments like these let you know what kind of society you are living in,' he says.

The silent, sad penguin is the key to understanding the novel as a portrayal of post-Soviet chaos, says Kurkov. 'The penguin is a collective animal who is at a loss when he is alone. In the Antarctic, they live in huge groups and all their movements are programmed in their brains so that they follow one another. When you take one away from the others he is lost.

'This is what happened to the Soviet people who were collective animals - used to being helped by one another. With the collapse of the Soviet Union suddenly they found themselves alone, no longer felt protected by their neighbours, in a completely unfamiliar situation where they couldn't understand the new rules of life.'

Kurkov retains a sliver of optimism. 'I still have hope, otherwise I would emigrate,' he says. But even though he remains in Kiev, his readership is growing much faster in the West than at home. 'People here don't read much now. People are very poor - they can't afford to buy so many books.'